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Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.

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01:00:00

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France 13, Us 13, S&p 7, California 6, U.s. 6, Europe 5, America 5, Oregon 5, Jimmy Hoffa 4, Carly Fiorina 4, Schwab 4, Tim Griffin 4, Arkansas 3, Fred 3, Humana 3, Simmons 2, Tempur-pedic 2, Sealy 2, Ameritrade 2, San Francisco 2,
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  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    September 28, 2012
    4:00 - 4:59pm EDT  

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lows of the third quarter and look ahead to how you invest in the fourth quarter. here's how we're settling out for the day. volume picking up at the end of the day today ahead of the fourth quarter next week. nasdaq gave up about 20 points. that's two-thirds of 1%. the s&p 500 weaker today by 6 2/3. that's about 0.5%. let's close the books on the third quarter. time to get ready for what could be a rocky fourth quarter. our next guests are cautious going into the end of the year. they're joining me now to tell you how to prepare for the volatility. gentlemen, good to have you on the program. thank you for joining us. who is worried about the fourth quarter? eric? >> well, yeah. i'm worried about the impact of the fiscal cliff debate.
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if we go over the fiscal cliff, the u.s. goes into recession. the map is actually just arithmetic. it's north tht that complicated. we think the debate will be uglier than it needs to be and that will create a lot of volatility. >> we are expecting an earnings comeback in the fourth quarter. do you think this is a question -- i'm asking everybody. do you think the contraction we're expecting to see for third quarter earnings is priced into the market, or is this going to be unexpected? >> i don't think it's priced in -- major contraction is priced in. all of our valuation methodologies, we've heavily discounted all year long consensus earnings. we're applying about an 8% discount. even at that point, we think equities represent good value, particularly related to other asset classes. >> keith, what do you think? we are expecting a negative showing for the quarterly numbers for the third quarter. is it priced in or no? >> yeah, it's already priced in.
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everybody's been expecting this. people have been looking for negative. everybody's expecting. we're in a very sensitive period right now. we're in earnings preannouncement season. you don't get companies coming out saying earnings are going to be better than expected. for the next week or so, you only get the ones that are going to underperform or get less than expected. makes people nervous. investors need to be cautious for the short time. we've a trend for the last three or four years where earnings have come in better than expected. we go into earnings season lower, the market pulls back, and once earnings are announced, the market starts to go up because the bad news is built in. this time isn't any different. >> for sure. rick santelli, we've had a tough two weeks for equities. toughest two weeks in a couple months. do you think the fed boom is wearing off? >> well, you know, i don't suspect that the fed's going to get any boom out of it, personally. on mortgage side, we've seen rates come down on a 30-year
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mortgage maybe 20, 25 basis points. i personally think that, you know, that amount of basis points isn't really going to alter anything. but it is helping stocks, but i do think, you know, the election could change so many things. it could make the fourth quarter great. it could make the fourth quarter less than great. one thing we know for sure, there's going to be a lot of volatility right about that time. when i think about high frequency trade and flash crash and how it affects the market on calm days, i shutter to think what kind of activity we're going to have if we get sweeps by either the left or the right on november 7th in the marketplace. >> that's a good point. jason, we're looking at the third quarter now ending. you come into work on the fourth quarter. what are you going to do? what's an your agenda? >> sure. we actually agree with a lot of what your other guests have said here. there's a lot of risk surrounding the fiscal cliff. our best case is it will be pushed on and not dealt with immediately, therefore the risk
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will be moved or pushed off to another day. in the meantime, there's a supportive economic backdrop. it's getting a little better. you need to take risk but not too much risk. what that means is don't buy just equities. that means use high quality equities. dividend growth stocks, not high dividend yield stocks. that means concentrating your portfolio in things that will produce a good return, not underperform inflation like cash and treasuries but deliver a long-term return to you along the >> are you still looking at dividend payers as a good place to invest even if we were to see dividend taxes go much higher because of that fiscal cliff? >> so we're proponents of dividend payers, but there's a qualification. it's dividend growth companies, not high-dividend yield companies, not your highest payout companies. it's intentionally the companies that are able to generate a sustained and regular growth of that dividend throughout time. it's high-quality equities we want to focus on. >> all right. we'll keep watching. thanks, gentlemen.
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we appreciate your time tonight. as we've been telling you, the third quarter is now in the books. who led the way? who is picking up the rear? jackie deangelis is here with the stat check. >> hey, maria. look at the heat map behind me. don't be fooled by it. it's been a pretty good quarter for stocks. the dow is up more than 4%. the nasdaq higher by more than 6%. the s&p 500 up just under 6%. speaking of the s&p, of the ten large cap sectors, nine were higher by 3% or many this quarter with energy leading the way followed by tech, consumer discretionary and financials. some of the risk on you could see in those groups. with the energy sector the best performing stocks we saw, cameron international. one of the standout weak links in the sector, alpha natural resources, down about 25%.
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meantime, tech, the second best performer up about 7%. some really big movers here we saw. first, computer sciences. google, western digital. these were seeing 30% to nearly 50% moves. on the downside, we saw amd having a 41% drop for the quarter. to give you a little bit of perspective on that competitor, intel down only about 14%. finally, the utilities was the worst performing sector this quarter. the only one up today. aes first energy was a lagger. it wasn't all bad news. nrg energy and american electric power were higher, as you can see there. a lit of a mix. when all is said and done, not a bad quarter, given both the domestic and international environments, the uncertainty we've seen, the election is coming. we did well for the third quarter. >> all right. sure did. thank you so much, jackie. don't even think about touching that remote. we have a lot more ahead on this friday edition of the "closing bell." mortgage rates hit rock
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bottom again, so why aren't home sales blowing through the roof? housing in the spotlight up next. and later, she's actually not crazy. the subsidized program for the poor has mushroomed since 2008 due to possible abuse. we'll talk to congressman tim griffin who's proposing a bill to reign it in. plus, what happens in france stays in san francisco? maria speaks with a mitt romney supporter and hp ceo carly fiorina.
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but hurry, the inventory clearance sale is ending soon. superior service, best selection, lowest price, guaranteed. ♪ sleep train ♪ your ticket to a better night's sleep ♪ welcome back. all day we've been looking at key issues facing specific industries in q-4. right now here's more on what we can expect with the housing front. >> here's what to watch for in the housing sector in the quarter ahead. the nation's housing market heads into the slow season on still shaky ground. gains in home sales and prices during the spring and summer
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months appear to be fading slightly. looking ahead, contracts to buy existing homes in august fell short of expectations as did contracts to buy newly built homes. mortgage rates are at new record lows, but mortgage applications are not reacting as strongly as one might expect. because this market has been fueled by investors largely using all cash. the investor share of sales has been falling briskly lately as properties dwindle, especially out west. without those sales on the low end, the housing recovery could take a step back ward. that's your q-4 channel check for housing. >> staying with with housing, mortgage rates are at record lows, so why aren't there more of a rush of people scooping up real estate? there have been signs of life in housing but certainly not a boom. fred glick is with me as well as diana on the heels of that report. the fed taking all this action to keep interest rates low.
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why aren't you seeing more of a rush of home buyers to get in there? >> well, i think people, ar sca -- are scared. they can't get a mortgage for very crazy reasons. and very logical reasons, such as there's no more no doc loans, income loans like we had years ago. there are still people who haven't filed two years of legitimate tax returns to be able to qualify for a loan. but also in some markets, rentals are still reasonable. it's just easier to rent rather than try to buy. and then go through the hassles of trying to get an appraisal that gets knocked down 20 to 30,000 by an appraiser who doesn't know the market. >> diana, are banks at a point
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where they want to take up the lending volume a bit more? people complain it's harder to get a mortgage. yet, the banks are saying they are lending. >> yeah, the banks are definitely lending. they're actually making record profits right now. that seems counterintuitive. when you look at it, yes, record low mortgage rates. but there is a very tight constraint on lending as we talked about. not everybody is getting those great rates, not to mention the capacity that the large lenders is really strained. they're not lowering the rates quite as low as they could. some are saying they could be passing on more of the savings to the borrower, but they're still not. so they're making better profits. again, sure, they need the volume, but they have a lot of volume in refinances right now. what we want to see is more of that purchase application volume. >> yeah, what is going to move the needle, fred, in terms of getting this market going? what are you waiting for to see traction? >> i am thinking that we really have to get a definitive confirmation of confidence in
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the economy. everybody's saying, yeah, things feel better, but it's not perfect yet. >> also, there's no urgency. the fed is telling us rates are going to stay at rock bottom until 2015. i don't have to rush into the market now. >> that and the fact your house is worth now what it was in 2004 before the few years of psycho fraud happened. people aren't saying buy, buy, buy because this is a super investment and it's going to go up 10% a year. yeah, people are waiting for the right house. there's people i've had as buyers who have waited a year to find the right house. yeah, they paid a little more for it, but it was worth the wait. people are picky too. >> diana, there's just no urgency. >> no urgency. i was just talking to an investor today. he was talking about this fundamental shift in attitudes toward homeownership. it's just not what it used to
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be. a lot of potential buyers out there are saying i can rent a single family home and even though, you know, home sale prices are lower and affordability is supposedly better, i don't have to deal with a mortgage. i don't have to deal with the upkeep. someone else can do it. most of all, i don't have to worry about anymore price depreciation. he says he's got a four-month waiting list of people who want to rent single family homes. these are families in good neighborhoods. >> that's a great point. fred, don't you think we're going to look back on this period and say, wow, remember when we could have got an mortgage 30 years at 3%? it's crazy. >> okay. i'll point out how old i am. i'm old enough to remember when rates were at 13 and 11 and went down to 10 and 8. at 8 i had people falling out of trees buying houses. the whole point is they have the confidence. the prices were lower when the rates were higher. that's the problem. what we're going to see is when we have the inflation of the
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rates that have to go back up, we may see the prices go down because the income levels are only at the same places they're going to be, and your affordability index has to stay within a window. one other thing i wanted to add is when you go out today to a home depot and you buy stuff for your house, it's a lot more expensive than it was, say, five years ago. so once you buy your house, maintaining that house is getting very expensive. that's another reason to go and rent. >> okay. all right. we'll keep watching this. at some point this market has to bottom. i know people think we have, but it seems like we're just bumping along the bottom. thanks, diana, fred. see you soon. >> thank you. >> it is the government dependency sound bite that's gone viral in. 24 hours. listen to this. >> everybody in cleveland, no minority got obama for. >> obama phone. she's talking about a real government program that
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subsidizes cell phones for the poor. guess what? you might be paying for it. did you know that? i'll speak with a congressman about how he's trying to reign it in next. then, think about a 75% tax rate. that could be a reality in france. the question is whether it could happen here. a mitt romney supporter gives us her take in a few minutes. and he's the head of one of the richest sovereign wealth funds. he sits down with me for an exclusive in a few minutes. he owns a number of banks. find out where he's investing. back in a moment. tdd#: 1-800-340 let's talk about low-cost investing. tdd#: 1-800-345-2550 at schwab, we're committed to offering you tdd#: 1-800-345-2550 low-cost investment options-- tdd#: 1-800-345-2550 like our exchange traded funds, or etfs tdd#: 1-800-345-2550 which now have the lowest tdd#: 1-800-345-2550 operating expenses tdd#: 1-800-345-2550 in their respective tdd#: 1-800-345-2550 lipper categories. tdd#: 1-800-345-2550 lower than spdr tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and even lower than vanguard. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that means with schwab, tdd#: 1-800-345-2550 your portfolio has tdd#: 1-800-345-2550 a better chance to grow. tdd#: 1-800-345-2550 and you can trade all our etfs online,
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welcome back. what a story this is. it's called lifeline. it's a long running government program that very few people were aware of until this sound bite went viral. >> you got obama phones? >> yes, everybody in cleveland, no minority got obama phones. he gave us a phone. >> he gave you a phone? how did he give you a phone? >> you sign up if you're on food stamps, social security, you got low income, disability. >> well, arkansas representative tim griffin was one of the few who did know about this program that gives low-income people free cell phones. he's discovered widespread abuse and ballooning expenses, so he's introduced a bill to fix it. representative tim griffin is with us, a republican from arkansas. he joins me now. thank you so much for joining
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us. this came before president obama, but it's known as the obama phone. why? >> well, what has happened is this program has ballooned, and now it's costing you and me and people who have cell phones over $1 billion a year. there's several issues here. the first issue is the waste, fraud, and abuse in this program. some folks are getting 10, 20, 30, 40 cell phones, they're selling them, bartering with them. but the broader issue is, where does the federal government draw the line on providing things to people? do we need to give people computers? do we need to give them ipads? i mean, you know, this raises the fund amental question of where we draw the line.
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i don't think the government ought to be providing cell phones, smart phones, blackberries. >> it's extraordinary, congressman. so tell us how it works. why is the president giving these phones to low-income people, and how come the costs have exploded so much? >> well, here's the deal. this is a lifeline program, which funds a number of things, including communications infrastructure. one of the things it funded for a long time is land lines. so if you are disabled or lower income and you need a telephone at home, then you can get a land line. well, a few years ago, the program was expanded by the fcc in particular to include free cell phones. well, there wasn't a lot of abuse with land lines because who wants 10 or 20 land lines in their home? no one, right? so what happened is when they
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converted it to cell phones, it just took off. it went from a few hundred million to over $1 billion. then came the extreme examples of fraud where you could just get multiple cell phones. and the fcc says, well, we're going to put a database together so there's only one phone per person or one phone per household. but that leaves us with the broader question. hey, it'd be great if every car had jumper cables and a first-aid kit, but does the federal government have an obligation to buy those for people? >> unbelievable. tell us about the bill that you're proposing. i just find this story extraordinary. i think you make the right point. where do you draw the line? i mean, we're having this fight over entitlements and cutting people's medicare. who knew we were giving away phones and the taxpayers were paying for it? >> sure. i'll tell you one place we definitely need to draw the line. that's the free cell phone
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service. i introduced hr-3481, the stop free taxpayer-funded cell phone act of 2011. i introduced it in november of 2011. i'll be real honest with you. it has been mind boggling to me that folks don't just jump on this bill. this is one of the biggest no-brainers i've seen since i've been in congress. here's the deal. if we can't cut something like this, well, then there's no way we're going to deal with a $16 trillion debt and $1 trillion a year deficit. >> medicare, medicaid, social security. fe forget about that. >> this is a no-brainer. first of all, look on your cell phone bill with the tliline tha says universal service fund or fee. you're paying for this. you need to call your member of congress, your senators, call anybody you can and tell them to get on board with killing this
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program. i have been shocked at how hard it's been to convince people. a lot of that's because people don't know. but you're helping educate them. >> on the cell phone, it says universal fee, universal services fee. that's the cost that taxpayers are paying so that low-income folks can get these phones. that's what we should be looking for. just to be clear, they're not just getting a free phone, but free service. >> it's the service. what happens is the government pays the service and the phones are often given by the provider. that's right. >> all right, congressman. great to have you on the program. we'll be watching this developing story. really an extraordinary one. good to have you on the program. thank you. representative tim griffin joining us, republican from arkansas. as we wrap up to the upcoming november elections, the administration is taking another swing at china. meanwhile, president obama this afternoon taking steps to block a chinese-owned company from acquiring facilities in oregon. but there may be a lot more to this story than meets the eye.
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amon is in washington. >> hi, maria. an extraordinary releases this afternoon from the united states government. the first thing we got was this order from president barack obama ordering the company to divest from a wind project in oregon using the so-called sifieuos program. this one is the fist time in 22 years that the u.s. government has done this it or president of the united states has done this. it goes beyond what we've ever seen before, including this language ordering the facility in oregon to effectively be rai razed, saying the company must remove all structures, items, or physical object, including the concrete foundations of the property. that's the first time anyone ever affiliated with this has ever seen anything like that. the treasury department later in
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the day issuing a statement saying why they might be so sensitive about this facility, saying, the wind farm sites are all within the vicinity of restricted air space at naval weapons system trading facility boardman in oregon. now, this is a sensitive military facility in oregon. we looked on their website to find out exactly what they are doing out there. here's what the navy says it's doing at this facility. they say they're conducting electronic combat training, including intercepting, identifying, and locating enemy emitters there. they also say they're participating in the test and evaluation of un-manned aerial systems or drones. you can see why the u.s. navy might be a little sensitive about a chinese company building wind farms in the backyard of this facility. this is a dramatic move from the president of the united states this afternoon, maria. >> all right. thank you so much. coming up next, oh, la-la. the french president is delivering on his promise to tax the rich at 75%. mitt romney supporter and former
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hewlett packard ceo carly fiorina next on whether we could see 75% tax rates on this side of the pond. later, small country, bountiful wealth fund. i'll talk to the prime minister of the country about where he's allocating the country's riches. then, call it the jimmy hoffa effect. the tomorrower teamster may be buried outside this house in detroit. stay with us. ve to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.
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welcome back. it's a nightmare for europe's rich, now it may be coming true. if you're a millionaire in france, the new budget proposes a staggering 75% tax. wealth editor robert frank with the latest. >> well, the french president once said he doesn't like the rich and you know what, he wasn't kidding. the top tax rate for millionaires in france will go from 48% to 75%. this would apply to people who make more than 1 million euros a year. people who make 150,000 or more a year will also see their rates go up. france has the highest, by far, income tax in the world. second place is aruba followed by sweden with 56%.
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the u.s. ranks 35th on that list with our top tax rate of 35%. now, french tax lawyers tell me that only 3,000 to 5,000 people will actually be affected by this tax, but they're an important 5,000 people. some of them are packing their bags. not so much because of this tax but because what they say is france's long-term budget issues and global competitiveness. many of the younger french are going to california. yes, compared to france, california is now a low-tax state. the rich today will go where their summon treated best. some, however, will endure the pain. j.k. rowling has come out and said she's staying in britain even if they hike her taxes. she said the rich who leave are, quote, greedy tax exiles. back to you, maria. >> wow. and they're going to belgium among other places. we heard that bernard arneau was going to belgium. where are the other tax favorable places in europe? >> monaco is still fairly
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popular. switzerland, which is a long-time destination. not so much. the french find the way of life there boring. they're going to portugal. they're going to the u.s. and singapore and hong kong. >> all right, robert. thank you so much. we'll keep following this amazing story. could a huge tax hike on top earners make its way across the pond to us? that's the other question. robert, stay with us. we want to bring in carly fiorina. you heard the discussion. what do you think? will this decision backfire? france? >> of course it's going to backfire. it's going to backfire because money and people can move anywhere in the world. it's going to backfire because even if you tax those 5,000 people at 75%, it can't possibly deal with the budget shortfalls that france faces. france is a very hostile business climate. it has been for some time, which
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is why business is exiting. i think there's something even more corrosive about this kind of policy decision. that is, it allows people to engage in this fantasy that tough problems don't require tough choices. france faces a lot of tough problems. they will require tough choices. they're just kicking the can down the road in a major way. they haven't cut spending. they haven't tackled any of the structural impediments in their labor markets. and now they're sayi ining to t french people, don't worry, we're just going to tax the wealthy 75%. it won't solve the problem. >> that's the thing, robert, isn't it? money is mobile. money will leave and go somewhere else. then they've got no tax revenue. >> exactly. i want to amplify something carly just mentioned. let's look at france's budget problems. they have a deficit of over $30 billion. this tax on the rich is going to raise maybe $.5 billion. this doesn't even get us close to the issue. the other issue on mobility, yes, it's true the french can leave.
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yes, it's true the americans can leave. this year we're seeing more than 2,000 americans give up their citizenship and move to another country, many of them for tax reasons. so i think it's easy to say it's hard to leave the u.s., especially with the exit tax. we're seeing at some point this inflicts enough pain that they will leave. >> yeah, i mean, i agree with you. so how likely are we to see this version, or a version of this in the united states? >> well, let me just say, maria, first of all, california, which is experiencing how futile this strategy is -- california has taxed businesses and wealthy individuals. certainly not at the french rate. >> it's about to go up even more. >> that's right. what's happening in california? businesses are leaving. wealthy individuals are leaving. the government of california is reduced, honestly, to worrying about the current stock price of facebook because they had pinned so many hopes on the facebook
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ipo. i really hope that we are sensible enough that we don't have a 75% tax rate, but i must tell you, i'm concerned when our president goes out and talks virtually every single day about taxing millionaires and billionaires and puts that forward as the most substantive solution to our debt crisis. >> well, the worst part is the narrative is millionaires and billionaires. meanwhile, it's people making $200,000 that are facing the highest tax rate since world war ii when this fiscal cliff happens. so which tax plan is floating around washington right now that has the most potential to end up with a heavy tax increase for top earners? >> well, you know, i think that the whole tax debate in the u.s. has become a bit of a red herring for both sides. i think the right spends too much time defending it. the left spends too much time advocating. there was a poll out today which looked at wealthy voters and women voters for romney. it showed that taxes were not even among the top five issues for wealthy voters. the most important issues are
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jobs, economy, how you're going to get this economy moving again. so i think on both sides, this has become a false debate over should we tax or should we not tax the wealthy. i think it really takes the focus off the bigger issue, which wealthy voters are really looking at. maybe raise their taxes, maybe not. that's not even what's important for the wealthy themselves. what's important is how to grow again. >> and how do you grow when you're facing $16 trillion in debt? you have to make tough decisions like the entitlements. >> free cell phones. >> give them free cell phones. >> back to the tax question. i think it is key to solving the deficit problem. the tax plan that i would love someone to put forward, and i'm not sure anyone has, is lower every rate and close every loophole. lower every rate on businesses. yes, on millionaires and billionaires. close all the loopholes, which generally favor the wealthy. they favor the large corporations. what that would do, obviously, is broaden the base.
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but it would help small businesses. >> absolutely. who are paying the ordinary income tax rate. if it goes up, they're really getting the short end of the stick here. the small businesses, which is the problem. >> the job creation engine. >> exactly. thank you so much. carly fiorina, robert frank. so how long do you think this will last if it is really true? zillo pegged the value of this detroit suburban home at only $52,000 this morning. this house, of course, is where police think notorious teamster's boss jimmy hoffa is buried. we'll have the latest on the big dig that has the nation gawking. then i'll speak with the man who heads up one of the richest sovereign wealth funds. he sits down with me for another cnbc exclusive in a few minutes. wait until you hear where he's investing qatar's money.
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domestic, abundant, clean energy to power our lives... that's smarter power today. welcome back. so is the mystery of what happened to jimmy hoffa about to be solved? nearly 40 years after his disappearance, police searched the grounds of a suburban detroit home. nbc's john yang with the latest. >> reporter: investigators took two soil samples from that shed. it's that area where an informant says 37 years ago around the time of jimmy hoffa's disappearance, he saw something being buried. police last week took
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ground-penetrating radar, looked at that radar and found indications of something about two feet beneath the ground. they've decided to go ahead, take these soil samples. they'll be analyzed by a forensic anthropologist at michigan state university. if they find evidence of human remains in those soil samples, then they'll start digging it up to see what's there. the police chief said from what he saw as they dug it out, they pulled out those soil samples, they were dark, murky earth. no immediate indications to the naked eye of something in there. but why they're going to be analyzed by a forensic anthropologist, to see if this is where the mystery of the disappearance of jimmy hoffa ends. maria. >> amazing. thanks so much. we'll keep following that. up next, find out why qatar's prime minister is investing the country's billions these days. he's next. you're watching cnbc, first in business worldwide.
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welcome back. qatar, the world's richest country on a per capita basis. i had the opportunity yesterday
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to talk exclusively with the nation's prime minister who also runs the sovereign wealth fund. i began by asking him how he's putting his nation's investment cash to work. >> let's talk about some of your investments. you said you're holding on to your strategic investments. is credit swiss still considered strategic to you? do you like the banks? >> i believe the banking sector, all the banking sectors need another minimum couple of years, then we can see that their balance sheet's more clean, their capital is stronger with all the new regulations. so we believe in our financial holding. >> are there other banks that you find as attractive? i know for a long time you had a large holding in barclays. what's your other take in the banking sector? >> we own smaller stakes in other banks. you know, even in bank of america we own a stake.
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i don't know, 1%, something like this. we own in bank of america. we own in other european banks, in france and other countries. but that's part of the financial st strategy. we own in brazil, stake of 5%, if i'm not mistaken. >> in terms of the other investments, are you expecting to raise your stake? sainsbury? >> at the moment, we are not thinking to do anything in that. it's not something we are thinking to do now. >> what about real estate? can you talk to us a little about how you have diversified the portfolio? i know you were very interested in commercial real estate the last time we spoke. where are you in terms of real estate in the world today? where are the most opportunities? >> well, i think we spend last four or five months over 5 to $6 billion if not a little more in
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real estate. mainly in europe and america. >> you are finding opportunities in europe even with the upset? >> yes, because that's -- we think if there is some good opportunity, why not? >> and of course the federal reserve has been keeping rates at such low levels and the ecb, what do you think about the fed and the central bank actions right now to keep this market afloat? >> well, they have no other solution. they have to do this. but what i would like to see and love to see as an individual, to see a strategy, not only take action when it's needed that's important, but i need to see what is the strategy for global situation, especially between the central banks, main central banks, actually. >> you have also been allocating capital to the mining sector, one of your strategic holdings. let me ask you about this situation with glencore. we have a deadline coming up.
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will you block that deal again? >> well, at the moment, you know, technically i cannot talk about it in details. but, you know, we own a big stake in we have no problem with the new price being offered. other aspects have to be studied and all i think have to be studied in xtrata. and i don't want to interfere on how it will go. certainly there will be this. >> you have said that you support the management? >> exactly. we support the management but this has to be discussed now. it is under discussion so i don't want to go through the details of that. >> i understand because monday is the big deadline and we are waiting to see what happens with this deal next. is there anything you can tell us in terms of what you would
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like to see happen? >> very clever of you, maria. same question but different way. >> thank you so much for humoring me there. let me ask you really about the landscape today because you have interest in so many different areas whether it be mining, banking, retail. where do you think the big opportunity is in terms of investing? >> i believe the money -- the value of the money is diminishing. even if you go historically 20 years and not farther from that and see what the dollar means to you 20 years ago all of us will remember and what does the dollar, you think to do with it today. you have nothing to do with it today if it is one dollar. and with more printing money without having strategy i believe the value of the money will go or will diminish very soon. but i believe assets, good
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assets either properties or good companies or mining for the long term there you can at least reserve your wealth. >> let me ask you in terms of your mining investments. are you interested in acquiring the aux business? >> we are studying. this is one of the things our people are studying. it still needs to come to the board to see the details of it. >> and you can watch our full interview on cnbc.com. my thanks. research in motion was in motion today. the stock rose 5% today. do traders think the troubled company has more room to run or is this their chance to run to the exit. given the move, how do you want to position yourself? >> option traders today were
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heading to the exits. we saw a couple of trades go up about 5,000 contracts. sellers of the october 8 calls. these trades were saying i want to get out of rim about $8. my break even was about $8.50. they don't see rim getting above $8.50. >> is the stock upside limit? >> you take a look at the mutual funds that own rim. 23% of these guys are growth-type oriented funds. can you own a company that is losing negative earnings here? that is declining sales. at value play here at .6 book to price ratio that can be misleading. if they have negative earnings now it is lower. it is hard to own this stock. >> good stuff. for more options be sure to stay tune on "options action" at the top of the hour right after
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"closing bell." up next my thoughts on the dichotomy between earnings and stocks. buyer beware. back in a moment. [ male announcer ] trading's like a high-speed train. and you don't want to miss it with thinkorswim by td ameritrade. you get knock-your-socks-off tools, simple one-click orders, real-time paper trading to hone your skills, plus anytime you need it support. ♪ stocks, options, futures, and forex. get your trading on track. thinkorswim by td ameritrade. trade commission free for 60 days, plus get up to $600 when you open an account. wanted to provide better employee benefits lancing the company's bottom line, their very first word was... [ to the tune of "lullaby and good night" ] ♪ af-lac ♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. [ yawning sound ] [ male announcer ] ...forbusiness.com. when you take a closer look...
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and my observation on the disconnect between negative earnings and positive stocks. investors have been plowing money into stocks. qe forever comes to mind. big institutions and deep pools of capital have been playing catch up chasing stocks in the face of anemic economic growth and a mess in europe that has yet to be resolved. all the major averages defined gravity this year. take a look. the dow industrials up 10%. the s&p up 14% this year and the nasdaq composite, the big winner of them all has shot up nearly 20% year to date. as money is flowing into stocks the back drop for corporate
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earnings has actually gotten worse. gross domestic product was revised downward to now show a slow growth of 1.3%. that compares to an earlier estimate of 1.7%. earnings are seen contracting. we are going to get those numbers in the next two weeks. s&p capital iq tells me they are expecting third quarter profits to fall 1.9% which would be the weakest earnings picture since 2009 which was in the middle of the recession. the drags will once again be materials and energy where earnings are expected to fall 19% each of those groups. there are positives including the financials which, of course, has been where the momentum has been in the stock market. bank earnings are expected to be up 8% the third quarter with the commercial banks and insurance companies seeing gains of 25%. this is all coming off of a very
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low base. s&p capital tells me leveraged buyout deals the best since the third quarter of 2007 will likely drive financials not to mention the mortgage business. the fourth quarter will be boosted by more catch up. there is $100 billion in so-called dry powder, unused capital where private equity firms might be rushing to get deals done. future guidance from these companies will be critical and we will get more clarity once we know who will occupy the white house. it was a downer although off of the worst levels. the dow jones industrial average finishes down tonight at $13,437. 831 million shares at the new york stock exchange. nasdaq down.
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s&p down. third quarter showed double digit gains for the quarter for these averages. that will do it for the "closing bell." thank you for watching. i hope you will follow me on twitter and google plus. special programming monday and tuesday i will be coming to you live from san francisco. "options action" begins now. this is "options action." tonight ultimate face saver. how would you like to get your money back in facebook for free? you don't have to like zuk. you just have to like the trade on the social giant. talk about two crude cats. a way to buy halliburton stock for just $1. why were options traders renting. scott nations explains. the action begins now.

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